Suppose a Caffeine-Deprived Man Needs to Wake Up $U = 3 \text { Coffee } + 2 \mathrm { Tea }$

question 27

Multiple Choice

Suppose a caffeine-deprived man needs to wake up.Suppose his preferences can be described by $U = 3 \text { Coffee } + 2 \mathrm { Tea }$ .If the price of coffee is $4 and the price of tea is $1,he will buy

• A)all coffee.
• B)all tea.
• C)some of both,but more coffee.
• D)some of both,but more tea.

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Definitions:

Supply Curve

Graphically represents the relationship between the price of a good and the quantity of that good that suppliers are willing and able to sell.

Quantity

The amount or number of a material or product available or produced.

Price

The expenditure foreseen, necessary, or allocated in trading for something.

Socially-Optimal Quantity

The level of production that maximizes societal welfare, considering both the benefits and costs of production and consumption.